Window Dressing
Well
perhaps the Wall Street saying "Sell Rosh Hashanah,
buy Yom Kippur" may prove not to be an old wive‘s
tale. The markets were lower for the majority of the session and
gained substantial ground in the last hour of trading. Or it could
just be that tomorrow is the end of the quarter and funds are window
dressing and adjusting portfolios for the close of the quarter. Either
way we will take another up day for the week.
However, the good old follow–through
day continues to elude the markets, and market confirmation is key to
showing us the green light and that a potential bottom is in. Well
then again today was a holiday, so that could be the reason why volume
was so muted. In any case we continue to look for stocks showing
momentum up and down.
Okay, now to some chart
analysis.
Everything
that I came up with today that looked like potential long candidates
broke out this afternoon! For example, Moodys’ Corp. (MCO)
was consolidating and boom it cleared its trading range on high
volume. Moody‘s
is
exhibiting some decent earnings growth (9%, 4%, 36% and 31%)
and has a modest 5 year growth rate of 19%. Not bad for the
environment we have been experiencing.
Itron Inc (ITRI)
has put in a double bottom and appears to be rising towards its pivot
point (it
has been consolidating for the last week). The company has shown
earnings growth of 200%, 103%, 43% and 125% respectively for the last
4 quarters.
Among the ETFs gaining in
the session, Telecomunicaoes Brasil (TBH)
climbed 7.4%.
The WEBS-Belgium (EWK)
gained 6.8%.
And the Biotech HOLDRs (BBH)
closed higher 6.0%.
Losing ground, the Morgan
Stanley Internet Street Tracks (MII)
slid 6.8%.
The Fortune E-50 Index fund
(FEF)
lost 5.2%
And the iShares S&P TSE
60 Index (IKC)
closed lower 2.9%.
Closing weak was the Telecom
HOLDRs (TTH)
after pulling away from its bottom it appears to be stalling out.
Remember that all securities
are risky. In any trade, you should always reduce your risk by
adjusting position size and placing open protective stops where
you will sell your long or cover your short in case the market turns
against you. For an introduction to combining price stops with
position sizing, see Loren’s lesson, Risky
Business.
Greg